[Federal Register Volume 60, Number 193 (Thursday, October 5, 1995)]
[Notices]
[Pages 52186-52188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24757]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 941 0015]
Federal News Service Group, Inc., et al.; Proposed Consent
Agreement With Analysis to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
-----------------------------------------------------------------------
SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, a District of Columbia corporation that
sells verbatim news transcripts, and its president, from agreeing, or
soliciting an agreement, to allocate customers or divide markets with
any provider of news transcripts; entering into, continuing, or
renewing any agreement that prevents Reuters America from competing
with the respondents in the production, marketing or sale of news
transcripts; renewing its news transcript supply agreement with Reuters
America for five years; agreeing, or soliciting agreements, with
competitors to fix or maintain resale prices for news transcripts; and
requiring or pressuring any competitor to maintain or adopt any resale
price for news transcripts.
DATES: Comments must be received on or before December 4, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Michael Antalics, FTC/S-2627, Washington, DC 20580. (202) 326-2821.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the following consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. Public comment is invited. Such
comments or views will be considered by the Commission and will be
available for inspection and copying at its principal office in
accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of
Practice (16 CFR 4.9(b)(6)(ii)).
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Federal News Service Group Inc., and
Cortes W. Randell, hereinafter sometimes referred to as ``Proposed
Respondents'', and it now appearing that Proposed Respondents are
willing to enter into an Agreement containing an Order to Cease and
Desist from engaging in the acts and practices being investigated,
It Is Hereby Agreed by and between the Proposed Respondents, their
attorney, and counsel for the Federal Trade Commission that:
1. Proposed Respondents Federal News Service Group, Inc. (``FNS'')
is a corporation organized, existing and doing business under and by
virtue of the laws of the District of Columbia, with its offices and
principal place of business located at 620 National Press Building,
Washington, D.C. 20045. FNS operates under the business name Federal
News Service.
2. Proposed Respondents Cortes W. Randell is an individual who is
President of Proposed Respondents FNS. His principal office and place
of business is 620 National Press Building, Washington, D.C. 20045.
3. Proposed Respondents admit all the jurisdictional facts set
forth in the draft of complaint.
4. Proposed Respondents waive:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the Order entered pursuant to this agreement;
and
(d) Any claim under the Equal Access to Justice Act.
5. This agreement shall not become a part of the public record of
the proceeding unless and until it is accepted by the Commission. If
this agreement is accepted by the Commission, it, together with the
draft of complaint contemplated thereby, will be placed on the public
record for a period of sixty (60) days and information in respect
thereto publicly released. The Commission thereafter may either
withdraw its acceptance of this agreement and so notify the Proposed
Respondents, in which event it will take such action as it may consider
appropriate, or issue and serve its complaint (in such form as the
circumstances may require) and decision in disposition of the
proceeding.
6. This agreement is for settlement purposes only and does not
constitute an admission by Proposed Respondents that the law has been
violated as alleged in the draft of complaint, or that the facts as
alleged in the draft complaint, other than jurisdictional facts, are
true.
7. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
Rules of Practice, the Commission may, without further notice to the
Proposed Respondents, (1) issue its complaint corresponding in form and
substance with the draft of the complaint and its decision containing
the following Order to cease and desist in disposition of the
proceeding, and (2) make information public in respect thereto. When so
entered, the Order to cease and desist shall have the same force and
effect as other orders. The Order may be altered, modified, or set
aside in the same manner and within the same time provided by statute
for other orders. The Order shall become final upon service. Delivery
by the U.S. Postal Service of the complaint and decision containing the
agreed-to Order to Proposed Respondents' addresses as stated in this
agreement shall constitute service. Proposed Respondents waive any
right they may have to any other manner of service. The complaint may
be used in construing the terms of the Order, and no agreement,
understanding, representation, or interpretation not contained in the
Order or agreement may be used to vary or contradict the terms of the
Order.
8. Proposed Respondents have read the draft complaint and Order
contemplated hereby. They understand that once the Order has been
issued, they will be required to file one or more compliance reports
showing that they have fully complied with the Order. Proposed
Respondents further understand that they may be liable for civil
penalties in the amount provided by law for each violation of the Order
after it becomes final.
Order
I
For the purposes of this Order:
A. ``Respondents'' mean Federal News Service Group, Inc., its
subsidiaries, divisions, and groups and affiliates controlled by
Federal News Service Group, Inc., its successors and assigns, and its
directors, officers, employees, agents, and representatives; Federal
[[Page 52187]]
News Service, its subsidiaries, divisions, and groups and affiliates
controlled by Federal News Service, its successors and assigns, and its
directors, officers, employees, agents, and representatives; and Cortes
W. Randell, an individual, his employees, agents, and representatives,
and entities controlled by him.
B. ``Reuters'' means Reuters America Inc., its directors, officers,
representatives, delegates, agents, employees, successors, assigns and
its subsidiaries and their successors and assigns.
C. ``News transcripts'' mean fast turnaround verbatim transcripts
of statements made by governmental officials or others covering a
variety of news events or individual news events or parts thereof that
are usually but not always produced within three (3) hours of the event
and transmitted in any manner to resellers and customers in the United
States. The definition of ``news transcripts'' does not include the
``Daybook'', a daily calendar of news events not containing news
transcripts, which is sold by Reuters to FNS.
D. ``News Transcript Provider'' means any person or entity which
produces news transcripts, by itself or through an arrangement by which
a third party produces news transcripts exclusively for that person or
entity, and markets and sells such news transcripts as a daily news
service on a subscription basis.
II
It Is Ordered that Respondents, directly, indirectly, or through
any corporate or other device, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from entering into, attempting to enter
into, or continuing or attempting to continue, any combination,
agreement or understanding, either express or implied, with any News
Transcript Provider to allocate or divide markets or customers with
respect to news transcripts.
III
It Is Further Ordered that Respondents, directly, indirectly, or
through any corporate or other device, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from entering into, continuing, or renewing
any agreement between Respondents and Reuters that prevents Reuters
from in any way competing with Respondents for the production,
marketing or sale of news transcripts.
IV
It Is Further Ordered that for five (5) years from either the date
this Order becomes final or July 31, 1995, whichever is later,
Respondents directly or indirectly, or through any corporate or other
device, in or affecting commerce, as ``commerce'' is defined in the
Federal Trade Commission Act, do cease and desist from entering into,
continuing, or renewing any agreements with Reuters providing for the
supply of news transcripts or the purchase or sale of news transcript
customer contracts or accounts.
Provided that nothing in this Order shall prohibit Respondents
from:
A. Selling a subscription for news transcripts to Reuters for
Reuters internal use but not for resale; and
B. Contracting with Reuters for Reuters to supply Respondents with
Reuters' Daybook.
It Is Further Ordered that Respondents, directly or indirectly, or
through any corporate or other device, in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from:
A. Entering into, attempting to enter into, maintaining, enforcing,
or attempting to enforce, any agreements or understandings with any
competitor in the production, distribution, or sale of news
transcripts, or any purchaser or reseller of news transcripts which is
directly or indirectly supplied by Respondents, that fix, establish,
control, or maintain resale prices or resale price levels for news
transcripts; or
B. Requiring, coercing, or otherwise pressuring any competitor in
the production, distribution or sale of news transcripts, or any
purchaser or reseller of news transcripts which is directly or
indirectly supplied by Respondents, to maintain, adopt, or adhere to
any resale price or resale price level for news transcripts.
VI
It Is Further Ordered that Respondents shall:
A. Within thirty (30) days after the date this Order becomes final,
distribute a copy of this Order and complaint to each of their
employees and news transcript resellers.
B. Within ninety (90) days after the date this Order becomes final,
and annually thereafter for five (5) years on the anniversary of the
date this Order becomes final, and at such other times as the
Commission may, by written notice to the Respondents require, file a
verified written report with the Commission setting forth in detail the
manner and form in which the Respondents have complied and are
complying with this Order.
C. Maintain and make available to Commission staff for inspection
and copying upon reasonable notice, records adequate to describe in
detail any action taken in connection with the activities covered by
this Order.
D. Notify the Commission at least thirty (30) days prior to any
proposed change in the corporate Respondent such as dissolution,
assignment or sale resulting in the emergence of a successor
corporation, or the creation or dissolution of subsidiaries, or any
other change in Respondents which may affect compliance obligations
arising out of this Order.
VII
It Is Further Ordered that this Order shall terminate as follows:
A. With respect to Federal News Service Group, Inc., this Order
shall terminate twenty (20) years from the date this Order becomes
final.
B. With respect to Cortes W. Randell, this Order shall terminate
twenty (20) years from the date this Order becomes final, unless Cortes
W. Randell totally ceases and does not resume his participation in the
news transcript business in any capacity, in which case this Order
shall terminate five (5) years from the date he ceased participating in
the business.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from Federal News Service Group, Inc.
(``FNS''), which is located in Washington, DC, and its President,
Cortes W. Randell.
The proposed consent order has been placed on the public record
for sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and decide whether it should withdraw from the agreement
or make final the agreement's proposed order.
The complaint alleges that FNS and Cortes Randell engaged in
acts and practices that have unreasonably restrained competition in
the news transcript business in violation of Section 5 of the
Federal Trade Commission Act. News transcripts are fast turnaround
verbatim transcripts of a variety of news events primarily involving
the federal government. Cortes Randell is the President of FNS, and
the complaint alleges that he formulated, directed, and controlled
the alleged acts and practices of FNS.
The complaint alleges that before May 1993, FNS and Reuters
America Inc. (``Reuters'') directly competed with each other for
news transcript customers. The news transcripts sold by Reuters were
[[Page 52188]]
produced by News Transcripts Inc. (``NTI''), and Reuters had the
exclusive right to market these news transcripts.
The complaint alleges that by May 1993, FNS, Reuters and Cortes
W. Randell agreed that Reuters would become a reseller of FNS-
produced news transcripts and not sell news transcripts to FNS's
customers; Reuters would not produce or sell any news transcripts
which compete with FNS-produced news transcripts; and Reuters would
not sell news transcripts below a minimum monthly price of $500.
The complaint further alleges that Reuters, in concert with FNS,
induced NTI to cease producing news transcripts and not to compete
with FNS. The complaint alleges that the purpose or effect of the
agreements was to eliminate competition in the production and sale
of news transcripts. The complaint alleges that after FNS became the
sole producer of news transcripts, many customers of FNS received
price increases.
The complaint also alleges that FNS and Cortes W. Randell, in
concert with Reuters, coerced a reseller to raise the price of the
reseller's news transcript database. The reseller raised its price
to assure its continued supply of FNS-produced news transcripts.
FNS and Cortes W. Randell have signed a proposed consent
agreement that prohibits them from agreeing to or attempting to
agree to allocate customers or divide markets with any provider of
news transcripts. For a five year period, the proposed consent
agreement also prohibits FNS from having a supply agreement with
Reuters or an agreement with Reuters to acquire or sell news
transcript customer accounts. Additionally, the proposed consent
agreement prohibits FNS or Cortes W. Randell from entering into
agreements with Reuters that prevent Reuters from competing in the
production, marketing, or sale of news transcripts. Finally, the
proposed consent order prohibits FNS or Cortes W. Randell from
fixing or attempting to fix resale prices for news transcriptions.
The purpose of this analysis is to facilitate public comment on
the proposed order, and it is not intended to constitute an official
interpretation of the terms of the agreement and proposed order or
to modify in any way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-24757 Filed 10-4-95; 8:45 am]
BILLING CODE 6750-01-M
